Several largest American companies will publish their financial results this week. BTCUSD and XAUUSD are skyrocketing. What's going on in the markets?
Will CPI Boost the US Dollar Again?
What will happen?
The Consumer Price Index will be out at 15:30 MT (GMT+2) on Wednesday, January 12.
This index is the primary inflation indicator in the country. At the same time, inflation is significant to currency valuation because rising prices lead the central bank to raise interest rates.
Last time, the actual results outperformed the predictions, and the inflation in the United States hit its top for the past 40 years. However, traders expected these numbers, and the US dollar strengthened beforehand. As a result, the element of surprise was lost, and the USD reversed down after the announcement. EUR/USD gained 570 points!
How to trade on the US CPI?
- If the indicator is greater than the forecast, the USD will likely rise against other currencies.
- If the indicator is lower than the forecast, the USD will likely fall against other currencies.
Instruments to trade: EUR/USD, USD/CHF, GBP/USD.
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